COVID-19 has been extremely damaging for many businesses, especially small businesses and their employees. Yet, tragedy is excellent at uncovering opportunity, and in this case, the opportunity lies in the fintech industry.
The response to the pandemic in the business world was to redo structure. Businesses that hadn’t previously been online have been forced to do so to maintain livelihoods. Therefore, whether business owners and consumers knew it or not, they began engaging with the fintech industry.
What is Fintech?
If you’re new to the concept, fintech is an amalgamation of the finance and technology sectors. You’ve probably engaged with this industry even if you were unaware of its official title. Fintech covers everything from banking online and using pocket stock apps, to being matched to a lender through a lender-finder service, such as Monzi.
Fintech’s main attributes are speed and convenience. It typically cuts back on paperwork and requires far less lengthy processing to complete. Fintech also enables global business. By completing financial transactions online, it becomes much easier to sell goods and services to foreign consumers.
How has Fintech risen to the occasion?
Now that you understand the presence and prevalence of Fintech, it becomes easier to see how the industry could flourish in a global pandemic. Yet, in the response phase of the business reaction, the industry did struggle to meet demand.
Initially, with many businesses and consumers panicking about funds, the industry experienced a boost in urgency. However, as the world has adjusted to a new way of socially distanced life, fintech and e-commerce have thrived. As consumers are unable to go to the banks, everything is taking place online. Same goes for shopping, with shops closed across multiple countries, online shopping and spending have increased in demand.
With Christmas coming up, it seems as though many families will be relying on fintech to bring the festive cheer. Especially in countries such as America and parts of Europe where the pandemic has a stronger hold.
Another aspect that is good for fintech business owners is that as many of them earn volume and transaction-based revenue. And, as the volume of consumers increase, so does the income.
What does this mean for the future of Fintech?
As the fintech industry is rapidly developing, it will most likely continue to innovate to maintain this way of living. Each sector of the industry is currently facing individual challenges. For example, online lenders are working to reconsider their underwriting standards. This means that they have to safeguard against liabilities for potential defaults this lending may cause, as applications increase.
As many businesses have moved online to stay alive and now utilise fintech for all forms of banking and financial needs, growth has been boosted. It can be suggested that now that these businesses have come online, they will stay online. Meaning this business for the fintech industry will remain.
Beyond merely supporting business, however, there are future opportunities for fintech in the field, such as working to distribute government aid to those requiring it. An area that required work before the pandemic even began.
Regardless of where the industry can expand to, one thing that can be confidently said is that it can only grow. Which means for aspiring entrepreneurs, with bright ideas regarding anything fintech, now is the time to get a foot in the door.